All submissions of the EM system will be redirected to Online Manuscript Submission System. Authors are requested to submit articles directly to Online Manuscript Submission System of respective journal.

Research Article Open Access

Towards Enhancing Service Delivery in Uganda’s Local Government Units:
Is Fiscal Decentralization Still a Feasible Strategy?

Abstract

The Ugandan government has for years depended on decentralization as a strategy for ensuring efficient delivery of services to its citizens. However, in the wake of obstacles like corruption, nepotism among others that have clouded fiscal decentralization, the need to re-examine its feasibility in explaining service delivery in Uganda’s local governments has become apparent. This study thus examines the extent to which fiscal decentralization explains improvements in service delivery in Uganda’s local government units. A quantitative survey research design was used in this study. Data were collected using a pretested questionnaire and analyzed using quantitative methods. Sampling was purposively done in three districts of Uganda and the respondents included Local Council members elected by local residents and the technical staff of the participating local governments. Correlation results revealed a positive and significant relationship between fiscal decentralization and service delivery (r=.262**, p<.01) while regression results indicated that Fiscal Decentralization can predict Service delivery in local governments (Beta =.452, Sig.=.000). This study therefore recommended that despite the current inefficiencies in fiscal decentralization, it still stands out as a feasible strategy through which the quality of services provided by local governments can be enhanced. As such, the implementation of fiscal decentralization going forward, needs to be augmented with requisite policies to help in alleviating challenges like corruption, nepotism hence improving accountability and value for money on all government contracts sourced at local government levels. This will help improve on the quality of services provided by local governments.

Keywords

Introduction

A number of existence studies reveal that fiscal decentralization
as implemented in developing countries is meant to improve service
delivery to the people while promoting government’s developmental
goals [1,2]. Fiscal decentralization a strategy for enhancing service
delivery has to an extent achieved good results in many African
countries such as Nigeria and Uganda [3,4]. Generally, governments
usually decided to decentralize so as to facilitate political, economic,
social, managerial, administrative and technical empowerment of local
populations to fight poverty by empowering them to participating in
planning and management of their development process [1,5]. In the
case of Uganda, the country’s powers to create local government units
are clearly enshrined in its Constitution. Article 179 of the 1995 Uganda
constitution allows the government through parliament to create new
districts with financial autonomy in the interest of improved service
delivery.

Notwithstanding the challenges, fiscal decentralization has been
seen as an effective way of promoting service delivery, especially
in rural areas. The 2006 report on Annual Assessment of Minimum
Conditions and Performance Measures for Local Governments in
Uganda indicated that many Ugandans agitate for the creation of new
districts and other local council units with hope that there will be better
service delivery [6,7]. However, on deeper analysis, empirical studies
reveal that there is nothing much on ground to justify all the praises
heaped on decentralization at large. In Uganda for instance, a number
of the decentralized units do not have capacity to run themselves as
evidenced by high failure rates of many of the newly created districts
that averaged 50% in 1997 with minimum standards and 45.5% for
districts created by financial year 2003/04 [8-10]. As a way of curbing
some the obstacles to service delivery, concerned institutions like the
Inspector General of Government (IGG) and other anticorruption
watchdogs have interdicted and prosecuted some of the guilty
local government officials on cases of financial misappropriation, corruption and abuse of office. For example, Lambright [11] reports
that on April 6, 2001, the Chief Administrative Officer (CAO) of Kasese
district in western Uganda was suspend from office over allegations
of corruption, financial mismanagement and misappropriation of
over Ush11M district funds and that the same scenario happened in
Soroti district in eastern Uganda, where the Chief Finance Officer
(CFO) and the District Development Program Officer were interdicted
over misappropriation of over Ush17M district funds donated by
the Netherlands to implement the district’s development Projects.
Considering these and many other factors such as corrupt council
officials and lack of accountability [12], it is pertinent to revisit the
feasibility of fiscal decentralization in improving delivery of services to
the people. Thus the purpose of this study was to examine the feasibility
of fiscal decentralization as a strategy for enhancing service delivery in
Uganda’s local governments.

The remaining sections in this paper present a review of the
theoretical and empirical literature, the adopted methodology,
presentation and discussion of findings, conclusions, recommendations
and areas for further study

Review of Theoretical and Empirical Literature

This section presents a review of theoretical and empirical
literature aligned to fiscal decentralization and service delivery in Local
Government Units.

Theoretical underpinning of the study

A number of theories have been adopted and adapted in studies
relating Fiscal Decentralization and Service Delivery. According
to Porcelli [13], these can largely be classified under the classical
theory and second generation theories. The classical theories here
include three related ideas, that is, Tiebout’s model of local public
good provision (Tiebout, [14-17], and Leviathan’s model/hypothesis.
The second generation theories include but are not limited to the
Decentralization Theorem with political economy by Lockwood
[18] and Decentralization in principal agent model of electoral
accountability [13].

The applicability of the Tiebout model and the Decentralization
Theorem in LDCs like Uganda, where corruption is common place,
fail on grounds that benevolence is not always assured in dealings
between central government and local government units as the
theories in question advance. Although also prone to certain forms
of corruption, the augmented ideas of the Leviathan hypothesis tend
to provide a more plausible explanation of service delivery efficiency
through fiscal decentralization. According to the Leviathan hypothesis,
central governments operate like leviathans who in order to increase
their control over the economy’s resources, favour decentralization as
a plausible approach of curtailing inefficiencies of central government
yet maintain ultimate power [13,17]. This model as augmented by
Lockwood [18] promotes efficiency using a political model were
decision-making process is implemented via majority voting over
alternative levels of public good provision rather than benevolence.
It can therefore be hypothesized that Fiscal decentralization enhances
service delivery even under conditions where delegates are corrupt.

Conceptualization of key terms and Empirical review of the
study concepts

Decentralization which was started on the principles of self-control
has of now proved to be a method of choice for bringing services
closer to the people with its various forms as has been widely and
successfully implemented in different countries. Decentralization
is understood in different ways by different scholars who have come
up with varying conceptual models and frameworks purporting to
explain the same concept. To this end, a debate has been ignited to
clearly understand the concept and practice of decentralization [19].
According Neyapti [20], Fiscal decentralization (FD) means devolution
of power and responsibilities of national (central), government
towards sub-national (local), governments. This study adopted
the conceptualization by Oommen [21]. According to Oommen
[21], decentralization means empowering the local people through
empowering the local governments. In this breath, one key strand,
called political decentralization is often referred to as the transfer of
authority and political functions from central to local government
based on the principles of equity and political representation in those
local governments. In Uganda, local governments have a political wing
manned by councilors who are locally elected on a balanced basis,
which allows representatives from various political parties and socialcultural
affiliations [22]. Stoop [23] further observes that genuine
decentralization should engulf power struggles and promote the
separation of power through devolution of power, in which resources
and political decision making are “transferred to a separate lower tier
of government”. On the other hand, COMFREL [24] and Eriksen et al.
[25] urge that democratic decentralization, in which local people use an
elected legislative body to solve their own problems should encourage
the participation of people in the decision making process and should promote access to important information on the way business is being
run by a given local government. Eriksen et al. [25] and COMFREL
[24] further urge that this kind of arrangement governments more
responsive to the needs of locals through prioritization and proper
resource planning and allocation.

According to scholars like Dziobek, Mangas and Kufa [1], the
typical reason for fiscal decentralization in developing countries is to
improve service delivery to the people while promoting government’s
developmental goals. This has to a certain extent achieved good results
in some African countries such as Nigeria and Uganda [3,4]. The
government of Rwanda decided to decentralize so that they facilitate
political, economic, social, managerial, administrative and technical
empowerment of local populations to fight poverty by empowering
them to participating in planning and management of their
development process [5]. Article 179 of the 1995 Uganda constitution
allows the government through parliament to create new districts
with financial autonomy in the interest of improved service delivery.
Notwithstanding the challenges, fiscal decentralization has been seen
as an effective way of promoting service delivery, especially in rural
areas. That is why many Ugandans are agitating for the creation of
new districts and other local council units with hope that there will be
better service delivery [7]. However, on deeper analysis, one realizes
that there is nothing much on ground to justify all the praises towards
decentralization at large. For instance, most of these decentralized units
do not have capacity to run themselves as evidenced by high failure
rates of many of the newly created districts that averaged 50% in 1997
with minimum standards and 45.5% for districts created by financial
year 2003/04 [8-10]. Consideration this and many other factors such
as corrupt council officials and lack of accountability [12], it is only
logical for one to conclude that fiscal decentralization has failed to
deliver services to the people.

Methodology

This section looks at the research methods used in the study.

Research design

A quantitative survey research design was used in this study. Data
were collected using a pretested questionnaire and analyzed using
quantitative methods.

Sample design

A sample of 600 respondents was picked purposively from three
districts in Uganda. Two districts came from Eastern Uganda and one
from Central. These include Mbale, Manafwa from East and Kampala
from Central Uganda. In order to ensure well balanced opinions, one of
the districts (Manafwa) was rural and one (Mbale) was urban. Kampala
district was included because it is the capital city of Uganda and hosts
most of the government ministries and the national parliament. At
total of 250 respondents came from Mbale, 250 from Kampala and 100
respondents came from Manafwa. These numbers were based on the
population density of the participating districts such that the urban
districts contributed more respondents whereas a rural district with
few residents contributed less.

The type of officials involved in study was Local Council members
commonly referred to as LCs who are elected by local residents. These
included L III (operating at sub county level), LC IV (operating at county
level) and LC V (operating at district level). In addition to the council
members, technical staffs of the selected local governments were also
involved on the study. These included Chief Administrative Officers, the Sub-County Chiefs, Town Clerks and Assistant Town Clerks,
Accountants, Revenue Collection Officers, Community Development
Officers, Health Officers, Education Officers among others.

Data analysis

The data collected was coded and entered into SPSS software
for analysis using quantitative methods i.e. descriptive statistics,
correlations and regressions.

Findings

This section presents the findings from primary data.

Validation of research instrument

Cronbach Alpha Coefficient (CAC) and Content Validity
Index (CVI) were used to test for the reliability and validity of the
questionnaire respectively. The results in Table 1 below were generated
for CAC and CVI: Cronbach Alpha Coefficient and Content Validity
Index results in Table 1 above indicate that the questionnaire was valid
and reliable since all variables scored CAC and CVI greater than 5.

Variable

N of point

Anchor

CAC

CVI

Fiscal Decentralization

7

5 point

0.605

0.613

Service Delivery

8

5 point

0.674

0.653

Table 1: Validity and reliability tests.

Participation in revenue planning

Descriptive statistics were also used to determine whether the
respondents had ever participated in revenue planning committees
and/or meetings in their respective local units. The results were
analyzed based on yes or no responses as seen in Table 2.

Have you ever participated in revenue planning?

F

%

Valid Percent

Cumulative Percent

Yes

181

40.7

40.7

40.7

No

264

59.3

59.3

100.0

Total

445

100.0

100.0

Source: Primary Data

Table 2: Participation in revenue planning.

Results in Table 2 above indicate that majority respondents
constituting 59.3 had never participated in revenue planning
meetings and/or committees in their local units. On the other hand,
181 respondents constituting 40.7 had ever participated in revenue
planning meetings and/or committees.

Planning role

Descriptive statistics including frequencies and percentages were
also used to determine the role played by respondents in revenue
planning meetings and/or committees in their respective local units.
The results were analyzed as seen in Table 3.

Role/service

F

%

Valid Percent

Cumulative Percent

Accounting Services

125

28.1

28.1

28.1

Education Services

75

16.9

16.9

44.9

Health Services

95

21.3

21.3

66.3

General Administration

85

19.1

19.1

85.4

Physical Infrastructure

29

6.5

6.5

91.9

Environment

31

7.0

7.0

98.9

Consultant

5

1.1

1.1

100.0

Total

445

100.0

100.0

Source: Primary Data

Table 3: Role played.

Results in Table 3 above show that most respondents played the role
of providing accounting services (freq=125). 95 respondent constituting
21.3% played the role of providing health services while 85 respondents
representing 19.1% provided general administrative services. 75
respondents, representing 16.9% provided education services, while 31
contributing 7% played the role of providing environmental services.
29 respondents representing 6.5% played the role of providing physical
and infrastructural services. Only 5 respondents representing 1.1%
provided consultancy services in revenue planning committees.

Fiscal decentralization and service delivery

Descriptive statistics including means were used to determine
whether and how fiscal decentralization improved service delivery in
local councils. The results were analyzed as seen in Table 4 below.

Descriptive statistics

N

Min

Max

Mean

Services are brought nearer to the people

445

1

5

4.43

People understand government priorities better

445

1

5

3.32

It is easy to get feedback from the community

445

1

5

4.44

There is better monitoring of government programmes

445

1

5

4.45

There is better quality work done by contractors due to close
monitoring

445

1

5

2.21

There is reduced bureaucracy

445

1

5

2.43

There is better accountability

445

1

5

2.42

There is value for money spent on government contracts

445

1

5

2.25

Source: Primary Data

Table 4: Service delivery.

Results in Table 4 above show that respondents strongly agreed
that fiscal decentralization brought services nearer to the people
(Mean=4.43), it was easy to get feedback from the community
(Mean=4.44), and that there was better monitoring of government
programmes (Mean=4.45). The respondents further agreed that fiscal
decentralization made people to understand government priorities
better (Mean=3.32).

The respondents however strongly disagreed that there was
better quality work done by contractors due to close monitoring
(Mean=2.21), there was reduced bureaucracy (Mean=2.43), there was
better accountability (Mean=2.42) and also that there was value for
money spent on government contracts (Mean=2.25).

Correlation for fiscal decentralization and service delivery

Correlation analysis method was used to examine the relationship
between fiscal decentralization and service delivery. Table 5 presents
the correlation results:

Fiscal Decentralization

Service delivery

Fiscal Decentralization

Pearson Correlation

1

.262**

Sig. (2-tailed)

.000

N

442

442

Service delivery

Pearson Correlation

.262**

1

Sig. (2-tailed)

.000

N

402

402

**. Correlation is significant at the 0.01 level (2-tailed).

Table 5: Correlation.

Correlation results in Table 5 above reveal that there is a positive
and significant relationship between fiscal decentralization and service
delivery (r=.262**, p<.01).

Regression analysis

In determining the power of fiscal decentralization in improving
service delivery, regression analysis was used. The results are shown
in Table 6.

Model

Unstandardized Coefficients

Standardized Coefficients

t

Siga.

B

Std. Error

Beta

1

(Constant)

1.97

.029

8.111

.000

Fiscal Decentralization

.431

.043

.452

6.024

.000

a. Dependent Variable: Service delivery

Table 6: Regression results.

Regression results seen in Table 6 above show that Fiscal
Decentralization can predict Service delivery in local governments
(Beta =.452). The regression model is valid given that Sig.=.000.

Discussion of Findings

This section presents a discussion of findings aimed at addressing
the question ‘To what extent has fiscal decentralization strategy helped
achieve improved service delivery in Uganda Local Governments?’
Correlation results revealed a positive and significant relationship
between fiscal decentralization and service delivery. The regression of
the two variables was also significant with a standardized coefficient
of (0.452). These findings not only mean that enhancement in service
delivery in local governments are positively related to improvements
in fiscal decentralization, but that changes in fiscal decentralization can explain about 45.2% of the changes in service delivery. In the same
breath, the findings on some particular questions asked indicated that
fiscal decentralization helps to improve service delivery because it
brings services nearer to the people and that it is easy to get feedback
from the community. The findings also indicated that there was
better monitoring of government programmes, people understand
government priorities better with fiscal decentralization. These
findings are in line with literature. For example Akinyele [3] and
Malesky [4]; Republic of Rwanda policy report [5], Republic of Uganda
[7] all argued for the same points. The findings however contradicted
with some literature on the suggestion that fiscal decentralization
brought about better quality work done by contractors, reduced
bureaucracy, improved accountability and also that there was value
for money spent on government contracts. The findings pointed out
corruption and nepotism as key hindrances towards the success of
fiscal decentralization. The findings further indicated that there was too
much political interference in the running of work, that councilors were
not well educated and knowledgeable about government programmes
and also that there was poor pay for technical staff. The findings further
indicated that paying councilors allowances and other emoluments was
too costly for local governments hence hindering service delivery. In
addition, the findings indicated that local governments did not have
adequate sources of revenue necessary for delivering services to the
people.

Conclusion, Recommendations and Areas for Further
Study

Considering the literature, findings and the discussion of the
findings, it can be concluded that fiscal decentralization is still a
feasible strategy for bringing about improved service delivery in local
governments. It can also be concluded that fiscal decentralization
most times fails to bring about better quality services because most
contractors hired to provide services on behalf of government are
compromised through corruption and other tendencies such as
nepotism, favoritism and abnormal bureaucracies. There is was a
problem of accountability and no value for money spent on government
contracts. Hence, this study recommends that fiscal decentralization
should be implemented along with other policies to help monitor
for corruption, nepotism, accountability and value for money on all
government contracts sourced at local government levels. This will help
improve on the quality of services provided by local governments. The
local communities should also be directly involved in evaluating the
works of contractors to ensure there is value for money. In schools for
example, parents can form associations that monitors the performance
of teachers. The same can be done in government hospitals and health
centers run by local governments such that government employees
provided better services. Village communities can also form committees
for monitoring government contracts in their areas of jurisdiction.
For instance a village committee can monitor the monitors of services
provided on borehole and report directly to the relevant authorities
such as the Inspector of Government and Anti-corruption courts
where a contractor has delivered poor quality services. Further studies
in this area should address a bigger sample to give a reflection of the
possible changes in the predictive power of the independent variable.

Malesky E (2005) Gerrymandering - Vietnamese Style: The Political Motivations behind the Creation of New Provinces in Vietnam. Paper presented at the Midwest Political Science Association 63rd Annual Conference. Measures for Local Governments, 2003. The Republic of Uganda